Secondary menu

You are here

Blogs

It's that time of year again. All the centrals out there with the wherewithal to prove they've completed the necessary training are reporting their CSAA Five Diamond Central Station Certification has been renewed.
Just today I received word that Monitronics International in Dallas, and RFI Security in San Jose, Calif. have received their renewal certs from the CSAA.
The CSAAâ€™s Five Diamond Certification program is designed to create standards of excellence for the industry. In order for a central station to earn its Five Diamond Certification, all its operators must undergo the online training course and pass a test, demonstrating proficiency in: alarm verification (reduction of false alarms); communications with public service answering points such as 911; electronic communications equipment; the codes and practices of such standards organizations as Underwriters Laboratories, Factory Mutual, and the National Fire Protection Association; the handling of a wide scenario of emergency preparedness situations.
And for those central in Canada or South America who speak French or Spanish, the training, as I noted in an earlier post, is now available in multiple languages with the cooperation of CANASA and ALAS.
According to the CSAA, there are over 2,700 central stations in the United States, and of this group fewer than 100 (less than 3%) central stations have undergone the process and achieved certification.
Keep up the good work guys!

First quarter numbers are coming in throughout the industry (I'll have Mace later). Here's how one of our few public integrators did: Eh.

Henry Bros. Electronics, Inc. Reports First Quarter 2009 Results
FAIR LAWN, N.J., May 14 /PRNewswire-FirstCall/ -- Henry Bros. Electronics, Inc. (NASDAQ:HBE) , a turnkey provider of technology-based integrated electronic security solutions, today announced results for the first quarter ended March 31, 2009.
The Company reported revenue of $15.3 million for the first quarter of 2009, representing a 3.8% decrease over revenue of $15.9 million for the same period a year ago. The slight decrease in revenue in the recent first quarter is primarily due the winding down of work completed on contracts for several large public agencies in the New York Metropolitan area, as well as a decline in revenue from the Company's Arizona and California operations. Partially offsetting these declines was an increase in revenue from the Company's Colorado and Virginia operations and revenue recorded under the Tactical Video Capture System ("TVCS") contract with L-3 Communications.

So, down, but not badly down, even in a brutal quarter that crushed any number of businesses. But this makes sense to me, considering that these are primarily long-term jobs that wouldn't just go away because the economy's in the tank. The effects of that 1Q will probably be felt late this year, early next year, when the pipeline is dry because nothing new was generated (that's just a guess, obviously).

The Company reported net income of $166,122 or $0.03 per diluted share, for the first quarter ended March 31, 2009, compared to net income of $283,957, or $0.05 per diluted share, in the comparable period of 2008. The Company's decrease in net income is principally the result of higher personnel related costs as part of a strategic growth initiative to increase the sales force by 62%. This initiative was implemented in order to take advantage of an anticipated increase in security spending related to public projects and the expansion of the Company's footprint into Houston, Texas and Grand Junction, Colorado.

Earning $166,000 on $15.3 million in sales is living dangerously. That's roughly a net margin of 1.1 percent. Thin.

The Company's backlog as of March 31, 2009 was $20,133,794, compared to $22,404,437 at March 31, 2008. The aforementioned work completed on several large public agency jobs in the New Jersey / New York area during the year ended December 31, 2008 is the primary factor in the decline in the backlog, partially offset by the L-3 Contract bookings.

The backlog's down, but not overwhelmingly so. That L-3 deal is big, obviously.

Jim Henry, CEO of Henry Bros. Electronics, commented, "While the revenue and net income that we generated during the first quarter was down slightly from last year's comparable period, bookings were in line with the prior year's quarter of $11.7 million and the proposal dollar volume doubled in the first quarter of 2009 versus the prior year. In addition, we have undertaken several reinvestment initiatives in the last several months including the expansion of our geographic footprint, an increase in sales staff, and the introduction of new products and services. Our management team and Board take pride in our ability to effectively anticipate and react accordingly to changes. This was true before the current recession when we curtailed spending and increased system efficiencies, and is true now as we increase staff to prepare for the anticipated project growth in our industry."

Well, if you invest in increasing your sales staff by almost 70 percent, I hope the bookings are at least flat and the proposals are almost doubled. Otherwise, you've just increased your people spend without getting anything in return. I'm not sure that's a good sign, even with the bad 1Q.

Henry continued, "As the new administration prepares to increase spending in areas in which our company has cultivated a strong operational expertise, we have worked to ensure that we have the right regional teams in place to effectively compete for these large infrastructure projects. This increased push to capture a significant number of these jobs is against the backdrop of the very successful management of our TVCS project, which began in October 2008. We strongly believe that our continuing work with several large municipalities and government organizations, coupled with our strong performance with the TVCS project, puts us in a very good position to increase our capture rate of projects related to the integrated security needs of the government as they look to improve our nation's infrastructure. For these reasons we are reiterating our guidance for a 6% operating margin on consolidated revenue of $80 million in 2009".

That operating margin seems awful low to be sustainably profitable. I'm assuming that's taking into account the investments in people and geography and 2010 will be aiming higher.

Here's a news story out of Bakersfield, Calif. about a guy who tries to steal a home security camera, and guess what?
Can you say doofus? Surprise, surprise, surprise. They get a photo of him and his car!
OK, this guy's audacity and stupidity is staggering, but the story is actually pretty scary. The woman said that she and her husband were on alert because they'd previously noticed a security camera had been turned upside down, and they'd been followed home a few days before.
A Bakersfield cop said that the theft of home security cameras is not unusual. And you'll never guess what he said these thieves do with the cameras...he said they like to install them in their own homes.
Here's the story, with accompanying video.

I've been hearing anecdotally that spend on IP video has been slowing rapidly (as has analog) with the recession. Here's at least one actual indicator, in the 1Q results of Optelecom-NKF, which chose a couple years back to refocus its business on IP video surveillance.
Since that link may be password protected, here's the dope:

Optelecom-NKF Reports First Quarter 2009 Results
GERMANTOWN, Md., May 12 /PRNewswire-FirstCall/ -- Optelecom-NKF, Inc. (NASDAQ:OPTC) , a leading global provider of Siqura(R) advanced IP-video network solutions, today announced first quarter 2009 results.
Revenues for the first quarter totaled $8.6 million, compared to $10.5 million for the same quarter of 2008. Video over IP-related revenue climbed 10% in the first quarter to $2.9 million, compared to last year's $2.6 million.

So, even though Optelecom is down fairly significantly for the quarter, IP video revenue is actually up 10 percent. That's pretty interesting. It could just be that the company has shifted resources to sell into that space particularly, but it's still a good sign.

The Company reported a net loss of $765 thousand, or $(0.21) per share, in the quarter ending March 31, 2009. This compares to net income of $148 thousand, or $0.04 per share, one year earlier.
Adjusted EBITDA for the quarter (as defined in the addendum to this release) was a loss of $551 thousand compared to profit of $976 thousand for the same quarter last year.

Basically, the company went from making money to losing money. Let's hope that's the economy and not an indicator of a bad decision on the part of management to focus on IP video.

"The sharp contraction in the global economy was the dominant force affecting our first quarter performance along with a reduction in reported revenue from foreign exchange translation rates," said Ed Ludwig, Optelecom-NKF's Chairman and CEO. "Orders slowed this winter as customers delayed projects in the face of budgetary concerns. As we look for signs of a bottom in the economic contraction and we actively contain costs, I view our long-term business prospects with measured optimism based on feedback from current customers and visits we've had with prospective customers."

So, they say it's the economy, not the focus. Since Axis is one of the few IP video companies with public numbers, and they've had some rough times, it's good to see another IP video company at least succeeding at IP video, even if it hasn't made for a profitably quarter.

[caption id="attachment_1882" align="aligncenter" width="225" caption="New Mace CSSS president Peter Giacalone"][/caption]
Mace today announced it had hired Peter P. Giacalone to serve as the president of its new Security Services Division, which includes newly acquired wholesale monitoring company, Mace CSSS, Inc.
Located in Anaheim, Calif., Mace CSSS, Inc. is a national UL listed central station that monitors approximately 30,000 end user accounts on behalf of more than 300 dealer clients. Mace CSSS also provides high quality nationwide video monitoring services, including CCTV, IP and other configurations.
Giacalone, with over 30 years of combined experience in both the electronic security and wholesale monitoring industries, will oversee all general management and sales, as well as marketing, efforts associated with the Mace Security Services Division and Mace CSSS, Inc. He will also develop Mace's new commercial dealer program, which will support the customers of Mace's monitoring services and surveillance products. Giacalone is currently the Chairman of the Central Station Alarm Association's Audio Verification Standards Committee and the Security Industry Association's Two Way Audio Verification Standards Committee. He is also a frequent guest speaker at the International Security Conference. Giacalone was COO of Criticom International/King Central-Monital.

Not sure if anyone cares or not, but here are the annual IFSEC award winners. No link, so see below:

Last night, the IFSEC Security Industry Awards 2009 were handed out to the deserved winners at a black-tie gala dinner at the Hilton Birmingham Metropole. Organised in association with the British Security Industry Association (BSIA), the awards acknowledge the people, products and technological advancements that have played a big part in the security industry over the past year.
The winners of the 2009 awards are as follows:
Access Control Product of the Year, sponsored by Info4security.com
smarti ELECTRA - TAB Systems Inc.
CCTV Product of the Year, sponsored by Norbain
VCC-HD4000P - SANYO Europe
Communication Product of the Year, sponsored by IFSEC SA
DualCom DigiPlus - CSL DualCom
Intruder Alarm Product of the Year, sponsored by TAB Systems
RLS-3060 Redscan - Optex (Europe)
Physical Security Product of the Year, sponsored by Genie CCTV
Guardian Smoke Screen and Securi-Dock - Concept Smoke Screen in partnership with G4S
Integrated Security Product of the Year
Emergency Messaging and Mass Notification System - Dedicated Micros
Security Project or Installation of the Year
Heathrow terminal 5 Car Park Solution - Siemens Building Technologies Security Solutions
Guarding Service Delivery to Customer
Merseyrail Electrics Security Team - Carlisle Security
AND
V&A Museum of Childhood, Activity Assistants - Wilson James
Policing Partnership of the Year
Docklands Light Railway Travel Safe Officer Team - Carlisle Security

Of all of those, I guess I'd say most cool for Dedicated Micros. I don't think many people think of them for mass notification, but they've obviously delivered a quality product.

The Security Industry Association today blasted President Obamaâ€™s budget proposal, saying it "includes ill-advised and disappointing reductions in funding for crucial physical security programs."
Â
Obama's proposed fiscal year 2010 budget would cut hundreds of millions of dollars from transit, port and school security programs and provide them with much less money than the amount authorized by Congress or recommended in recent legislation, a release from SIA said.
Here's more:

Obama seeks to reduce funding for both the Transit Security Grant Program and the Port Security Grant Program from the current $388.6 million each to $250 million each for the fiscal year that begins Oct. 1. Congress authorized $900 million for the transit program and $400 million for the port program for fiscal 2010.
Â
Obama would keep funding for the Secure Our Schools program at the current level of $16 million, but this is well below the $50 million authorization level recommended in the School Safety Enhancements Act that was unanimously passed in September by the House of Representatives.
Â
â€œPresident Obama is looking for cuts in all the wrong places,â€ SIA Director of Government Relations Don Erickson said. â€œWe understand and support efforts to be fiscally responsible, but taking money away from programs that protect children in the classroom and the millions of Americans traveling on our mass transit systems or conducting business at our nationsâ€™ ports is not in any way responsible. It is a misguided step in the wrong direction.â€
Â
The Transit Security Grant Program provides federal money to regional transit systems to help them protect critical infrastructure from terrorism. The Port Security Grant Program provides financial assistance to port areas for the same purpose. The Secure Our Schools program funds the development of school safety resources and security improvements at schools.
Â
SIA will work to secure full funding for all three programs, Erickson said.
Â
â€œFunding these programs at their authorized levels would total just over $1.3 billion,â€ he noted. â€œFor transit systems, ports and schools, that is a significant amount of money that can go a long way toward stopping people who wish to do us harm. For the federal government, though, it represents less than one-half of one-tenth of one percent of the annual budget. These cuts are supposed to represent fiscal restraint, but they will lessen national security much more than they reduce federal spending.â€

8:15 - Grabbed a donut and an orange juice and made it to the presentation on video monitoring being given by Doug Marman from VideoIQ and Mike Hanlon from ViewpointCRM. I've seen this from Doug before, but I haven't seen him teamed up with Mike, who can provide the perspective of what goes on at the video monitoring station when the VideoIQ analytics sound an alarm.
Mike: Wackenhut and Securitas are both doing this themselves, and they're two of the largest guard companies out there. They believe in this as well. It's not about bad-mouthing the guards, saying they fall asleep, it's about telling customers what can be done and solving the problems they're having.
I was at a water treatment plant, they've got a security guy they're paying to make sure the seals aren't cracking and the water's at the right levels, and they pay for a port-a-potty, and a trailer, and a dumpster, just for him. The first thing the guy tells me is that he came out here at 11 at night, and the guy has three time clocks sitting on his trailer's desk - he'd bought time clocks from the manufacturer so he didn't have to patrol the area and punch in at the clocks that were at fixed locations. That was an easy sale.
Doug: But you actually have to be able to replace that - how can you do it? You need intelligent cameras or you're just going to have the same problem of bored guards sitting in your facility. No one can watch cameras all the time.
Mike: Multi-family housing is a great market. You can voice down to people who are drunk on the property and say, hey, go drink on someone else's property down the street. Just don't do it here. You're not telling them to be saints, you're just telling them to be derelicts somewhere else.
Doesn't have to be IP audio either. We can do POTS, whatever. We could do a whole class on audio. But basically it's almost all voice down. You can have voice up as well, but that's that often used right now.
(I spoke with Doug yesterday and he said they have the technology on the VidoeIQ cameras to do voice up, but they haven't "turned it on yet.")
Doug: Love the story about Mike being led around a property by a guard, just finishing an installation, and kids jump the fence, run through the property, and the guard didn't say a word. Then, after they leave, he says, "that's why we're hiring you guys."
Mike: And it's not about bullying people. Most of the time, it's about being polite on the voice down and just suggesting they go somewhere else.
Doug: Most of the time, you're doing motion sensors, etc., and because of the false alarms, you end up putting in video anyway to figure out what's tripping the alarms. With video analytics, you get the video without the false alarms.
Over 60 percent of the crime happening for colleges and retail is happening in parking lots. We have good solutions for indoors, but the industry hasn't come up with a good solution for outdoors. This is a good solution for outdoors, especially where there can't be a fence.
8:40 - Great point by Mike here: This is not about arresting people. Sonitrol is great at dispatching and catching people and it makes great video and stories when you get the guy in the middle of the crime. But what if you could stop the guy before anything gets smashed or broken into? Wouldn't that make the client ultimately happier? Nothing had to get fixed and there wasn't a big brou-ha-ha with the cops tramping through the store and making a big mess.
Some numbers from Doug: Guard services are maybe $40 billion in the U.S., and 15 percent of that, give or take, could be done better with video analytics. New market created by this is somewhere like $6 to $8 billion.
Mike: Used to be when we saw they had their own command center, we'd be like, darn, nothing for us here. Now that's low-hanging fruit for us. They're struggling to staff the center, to operate it correctly. We say, shut that down, let us use your infrastructure, and we'll do it for half the cost.
Replacing one body, three shifts, is saving $157,000, which is the average cost of three shifts of a security officer in the United States. Some regions are much more expensive. Though sometimes the cheaper guy is a lot easier to replace.
(By the way, an integrator said, "Say that number again," when Mike talked about the cost of one guard.)
And don't slander the guard, by the way, because he has value, maybe he did CPR on an employee or customer, but you can augment what he does, you can let the client check on that customer.
Doug: The cost of the equipment should be made up in the first six months to a year. And then going forward they can save 50 percent on their guarding costs.
Team with a guard firm. They're often good at HR and labor, but they're not good at technology. And often they're bidding super low, trying to compete on pennies, and they have huge turnover. So if you can let them bid lower and hire fewer people, they'll get you in the door for the installation and you'll share the customer.
Doug: My guess is that in 10 years, video monitoring will be the most significant change that happened in the security industry this decade.
Auto dealerships: We have deployments at more than 50 car lots. 60-70 percent of them had on-site guards previously. Remote guarding reduced costs by 75 percent. Average pay back time was seven months.
But it's not just security for the auto dealers. You can invite customers to browse, alert sales people when customers arrive, maybe you don't need a fence, don't have the cost of moving the cars all the time to bring them closer to the lot.
Mike: Most exciting growth we're seeing is in management tools, a concierge service, letting them know what's going on at their property.
Making sure they're not the last guy that got plowed when it snows, keeping track of other vendors, when they show up and how they perform.
8:55 - Here's where Mike talks about the cool thing they're doing with LL Bean in Freeport: Basically, they have these information kiosks, outdoors, you walk up to it, push one button for emergency, another for information. You push the button, a uniformed officer answers in live two-way video, "welcome to Freeport, how can I help you?" They like it so much they've put one at the State House to help drive people to the shops at Freeport.
Doug: Or how about a remote chaperone. An employee feels unsafe walking through the parking lot. They call the monitoring station, say they're about to walk out, and the operator says they'll watch them and maybe even play a message in the parking lot: "Hello everyone, just reassuring you that this parking lot is monitored by a live video operator. Have a nice day."
Or replace the doorman.
9:05 - City surveillance - City of Birmingham, population 230,000, ION (an integrator - you'll see a story on this in our June issue, actually) is working as a force multiplier for their police department. There's another city in New Hampshire who are working with a private integrator to provide video surveillance for their police department. There are municipal funds available for this kind of service.
9:20 - All of the Viewpoint CRM services can be white labeled, so that the customer doesn't know this isn't your video monitoring station if you don't want them to. They have a number of white papers and videos that you can throw your logo on.
Now lots of stuff about how cool the VideoIQ camera is. I'll let you go to their Web site or something for that (we've written about their iCVR - use our cool new search engine to find it - or go here).
9:30 - Admittedly, the object search thing that VideoIQ can do is pretty cool. They can track an individual person as they travel throughout the surveillance system, and then can go back and search the storage for when that person was recorded before, when they came into the building and how. If that works in real time, that's pretty cool.
9:45 - Reminder to check out www.remoteguarding.org, the alliance Viewpoint and VideoIQ formed to create some remote guarding standards.
Session done. Not as many questions as I thought there would be. But there's general grumbling that this is pretty interesting when Doug asks if it's interesting. I think people are just a little sleepy still.